Data protection at Telefónica NEXT:

What happens to client data and how everyone decides it for themselves

The team of Telefónica NEXT works with various data in order to develop solutions for cities, retail and many other areas. But a wealth of data is worthless without data protection. Not only is the data comprehensively protected, but clients also remain in control. Here we explain which data Telefónica NEXT works with, what knowledge the company gains from it, and how every client can decide it for themselves. Telefónica NEXT works with anonymised, as well as personal, data. The use of both these types of data differs considerably. On the one hand, Telefónica NEXT analyses large quantities of data, known as ‘big data’, consisting of anonymised data. These are not linked to individual clients. The findings from the analysis of this data will be used in future for many new ideas and solutions for all areas of life – from mobility and health to private consumption. Personal data, on the other hand, enable Telefónica NEXT to tailor their offers specifically to the client in question. The client’s explicit permission is needed to use this data. Regardless of whether it is anonymised or personal data, they can decide themselves about the use of their data. That is what Telefónica Germany means with the slogan “Your World, Your Choice”.

The origin of anonymised data

With over 44 million client accesses, we receive large quantities of data through our day-to-day business processes. This includes in particular data that only we, as the network operator, receive – for example, mobility data. This happens as mobile phones communicate with mobile cell sites when using the internet or making calls. It results in the collection of around four billion data points per day. This data initially goes through a three-stage anonymisation procedure. The development of this anonymisation process was monitored by the Federal Commissioner for Data Protection and Freedom of Information and received the “Certified data protection” seal from TÜV in August 2016. It ensures that client data is completely anonymised and cannot be traced back to certain people later on, either. Due to the anonymisation, the client’s permission is not legally required. With a simple web form, Telefónica nonetheless enables its clients to refuse the use of their data at any time. Every client is therefore able to weigh their personal preferences against the economic and social benefits provided by their data.

How anonymisation works exactly

Anonymisation takes place in three complex steps: the data sets are broken down into their smallest possible components and their personal references are removed. They are then allocated to different areas in separate high-security data centres. The data characteristics are easily changed at random. So, for example, the time at which a text message is sent is deleted. The area that is saving the data also does not know what information they are storing. Information is only generated if it describes the same characteristics as a larger group. The aggregated data is used to extrapolate to the general population. In this regard, the larger the underlying quantity of data, the more reliable the statistics. So it is not the individual, but the size of the group that is relevant. In other words, it is not the grain of sand, but the beach that is of interest.

Social and economic benefit of anonymised data

The findings from analyses based on data are interesting for cities that suffer from high traffic volumes, for example, or for transport companies. The potential of mobile network data as a reliable source of data for traffic planning has been approved the Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO in a study in Stuttgart. In addition, the company is involved in a pilot project in Nuremberg, in which traffic flows, and thereby air pollution, are analysed on the basis of mobile network data. Telefónica NEXT has also participated in a study in Hamburg in which, together with the lift-sharing app flinc, the company examined the potential of a dynamic shuttle service based on anonymised mobile network data. Data analysis helps trade by creating more customer-friendly communication, suitable assortments or opening hours. For example, Telefónica NEXT uses mobile network data to analyse client flows in the vicinity of a branch. Further information on smart retail is available here.

The origin of personalised data

Personal data is treated completely differently. Compared to anonymised data, it is not automatically generated on the internet. Instead, clients book a certain service that they want, such as O2 More Local. By booking these services, the client voluntarily provides different information and agrees to this data being used for certain purposes. The service can be cancelled at any time, so the client retains control of their data.

Offers that interest the client

With free booking from O2 More Local, the client allows Telefónica NEXT to use their data, such as location, weather, time of day, age and sex, to send them offers from brands by mobile messaging. For this, Telefónica NEXT assigns suitable offers to the participating clients, based on their data. For example, a chain of chemists defines that women aged 30 to 35 located near a branch receive a text message with a certain voucher. The client can then redeem it in the branch. Since the offers are based on individual data, they are more likely to be considered relevant by the target group. The data will not be passed on to participating partners at any time, but will remain safely at Telefónica NEXT. All location-based data are automatically overwritten after eight hours.